Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Link to this | Hansard source

I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

APPROPRIATION (NATION BUILDING AND JOBS) BILL (No. 1) 2008-2009 [No. 2]

Up until now, Australia has been partly insulated from the full impact of the global economic recession, but things are about to get more difficult—much more difficult.

The unemployment figures released today show that unemployment is now on the rise. It is a sign of what is to come. This global economic recession is the equivalent of an economic cyclone, spreading from country to country, continent to continent, leaving wreckage in its wake, devastating economies, devastating jobs, and crushing the dreams and the livelihoods of families across the world. The cyclone started in the United States, moved to Europe and then hit our major trading partners: China, Japan, Korea and India.

Now it is heading in our direction.

When you know an economic cyclone is coming, there are two things that you can do. You can follow the Liberal Party plan and do nothing; you can do nothing, just sit tight and hope that it simply passes you by—because, remember, the Liberals have already said that the global financial crisis has been overhyped. The alternative is decisive action, and this government stands for decisive action—to do everything possible, to do everything in our power to prepare for it while there is still time. That is what this government’s Nation Building and Jobs Plan is all about: supporting our jobs and small businesses before the brunt of the global economic recession hits Australia’s shores. It is not a silver bullet—there is no magic medicine available to cure all the ills of the global economic recession—but every responsible government around the world must play its part to reduce the impact of this global recession and to help our people.

Almost every government in the developed world is going into deficit to stimulate their economy in the face of the global economic recession. As the Australian Chamber of Commerce and Industry has noted this afternoon:

“No other nation’s parliament has refused a major stimulus package in the current environment of unprecedented global economic downturn.”

No other country’s parliament—except this parliament, led by this opposition. What the opposition has done by this act of economic sabotage in the Senate is to threaten the jobs, the livelihoods and the businesses of nearly 100,000 Australians.

All around the world, governments are taking unprecedented action to support their economies in the face of virtually unprecedented challenges. Yesterday in the United States they agreed on a planned fiscal stimulus of in excess of $1 trillion.

Yesterday the United States committed $2 trillion to a further rescue of its banking system. The United States is responding to a crisis which has claimed more than half a million jobs each month since September. So are all governments around the world; so are all parliaments around the world—except the Australian parliament, with an opposition led by the Liberal Party and its vote against a plan to support nearly 100,000 Australian jobs.

Here at home, sobering unemployment data was released today. The unemployment rate increased substantially from 4.5 per cent to 4.8 per cent in January, the largest monthly increase since October 2001.

The number of unemployed persons increased by 36,800 to 540,200 persons. The Deputy Leader of the Opposition and Treasury spokesperson for the Liberal Party described this jobs result as strong:

Today’s data clearly demonstrate the strength of the Australian labour market despite a worsening international economy. This supports the Coalition position that the Government’s $42 billion spending spree is simply too big … The Liberal Party is demonstrably out of touch. It is demonstrably out of touch with the challenges facing the Australian economy now and the challenges facing those 36,800 Australians who, in the most recent jobs data, have lost their jobs. The Australian Chamber of Commerce and Industry today described today’s jobs data in very different terms to those employed by the Liberal Party.

The Australian Chamber of Commerce and Industry said today:

“Today’s employment data is the latest evidence of the need for urgency. The decision by the Senate this afternoon to not pass the Australian government’s Nation Building and Jobs Plan is a blow to business confidence and investment certainty.”

That is from the Australian Chamber of Commerce and Industry.

How does the quantum of the stimulus package proposed by the Australian government compare with those which are being recommended elsewhere? The Leader of the Opposition today described the government’s plan as too large, a package of spending that represents an enormous percentage of GDP. The size of the stimulus package is entirely appropriate to the challenges we face.

This package delivers 1.1 per cent of GDP in 2008-09 and 1.4 per cent of GDP in 2009-10, for a total of 3.4 per cent of GDP over the forward estimates, two per cent being delivered in calendar year 2009.

The size of this plan is also modest in relation to what other governments are doing abroad. For the benefit of the House, President Obama’s stimulus package is six per cent of GDP, Italy’s package is 5.2 per cent of GDP, Canada’s package is 3.7 per cent of GDP, Korea’s package is 8.4 per cent of GDP, Germany’s packages come to 3.4 per cent of GDP, Japan’s packages total 2.3 per cent of GDP; and, again, that which is contained within the Australian package translates into two per cent of GDP in calendar year 2009.

The Leader of the Opposition has also argued, as has the Liberal Party more broadly, that this $42 billion stimulus plan advanced by the government will result in too much borrowing. Average net debt across the OECD is estimated to be 45 per cent of GDP in 2010.

In 2009, net public debt in the following countries is expected to be as follows: 50 per cent of GDP in the United States, 48 per cent of GDP in the United Kingdom, 24 per cent of GDP in Canada, 44 per cent of GDP for the Euro area and, I repeat, 45 per cent on average across the entire OECD.

As a consequence of the government’s proposed package and dealing with the borrowing requirement which comes from the collapse in revenues occasioned by the global economic recession, the Australian package and the borrowing associated with it for this collapse in revenues will result in five per cent of GDP as net debt. The OECD average, therefore, is nearly 10 times that of the Australian proposed average. Let us put that into context.

Secondly, let us go to the argument about debt in general and examine the Liberal Party’s hypocrisy on the question of debt. Prior to 1996—and some honourable members will recall this—the Liberals said that they would reduce foreign debt. I quote the former Prime Minister, Mr Howard, who said, ‘I can promise you we will follow policies which will bring down the foreign debt.’ Let us examine the factual record. In 1996, foreign debt stood at $193 billion or 37.9 per cent of GDP.

When the Liberals lost office in December 2007, foreign debt stood at $603 billion or 55.5 per cent of GDP. Under the Liberal government’s economic management—and bearing in mind the promise they solemnly made to the Australian people—foreign debt exploded by more than 200 per cent. The Liberal Party’s hypocrisy on the question of debt is a matter of documentary record.

The Liberals say that a $42 billion stimulus package is too big. I have just contrasted the size of that package as a percentage of GDP with all of the stimulus packages of those major economies that I have just referred to. How does the quantum of this package therefore sit with what is being said by responsible economic organisations in Australia?

The Liberal Party say it is too much, but the International Monetary Fund, the Reserve Bank of Australia, the Treasury of Australia, the Australian Chamber of Commerce and Industry, the Australian Industry Group and the Council of Small Business Organisations of Australia all disagree. They all disagree with the Liberal Party’s position. The International Monetary Fund, the Reserve Bank of Australia, the Commonwealth Treasury, ACCI, the AIG and the council of small business are not units of the Labor Party. They are independent organisations which speak with an independent voice, and they say as one that an economic stimulus package of this size is right.

So let us be clear: those organisations, led by the International Monetary Fund, the Reserve Bank, the Treasury and the peak industry bodies, say that this quantum of stimulus is right and the Liberal Party alone says it is wrong. The International Monetary Fund has said:

What we need is more than 1 percent—of GDP—we certainly need at least 2 percent …

The Reserve Bank of Australia confirmed a 100-basis point cut in interest rates on the very day and following the government’s announcement of its fiscal stimulus package, because the Reserve Bank noted the importance of aggressive, simultaneous action of fiscal and monetary policy. The Secretary of the Treasury said in Senate testimony:

These are highly unusual circumstances, and we have advised … that there was a need for fiscal policy action and that it was quite urgent.

He went on to say that with a smaller package:

… there would be some point at which GDP growth in 2009-

10 in particular might well have been negative.

Let us turn to the remarks of the Australian Chamber of Commerce and Industry. Mr Evans said:

“Such is the scope of our current economic difficulties that this package, combined with monetary easing, is absolutely essential.”

He said it was ‘absolutely essential’. He continued:

The size of the package at two per cent of GDP in 2009 is appropriate and in line with our own estimate—referring to ACCI’s estimate— … of what is required. We recognise and accept that a temporary deficit is required to fund the program. The Australian Chamber of Commerce and Industry

continued:

“… we consider it is in the national interest for those measures to be passed, and passed quickly, to avoid uncertainty and to promote confidence.”

The Australian Industry Group said:

“The nation building and jobs plan announced by the Federal Government today is simple and substantial, and will provide a big stimulus to help keep the economy moving.”

Further: “The package targets consumer spending, which is absolutely critical—“ I repeat: ‘absolutely critical’—

… to our near-term economic prospects, and boosts capital expenditure—looming as one of the real casualties of the downturn.

The Council of Small Business Organisations of Australia said the following: “The worst thing we can do is not to do anything. I think half-hearted action is not required as well. We want someone to get out there and do something big, and this is big.” So says the voice of small business.

Then we come to that well-known other front of the Australian Labor Party, the Liberal government of Western Australia, who through its Treasurer Buswell said: “That type of stimulus—whether it impacts on consumption, expenditure or investment—is something that the state government of Western Australia welcomes.”

There you have the IMF, the Treasury, ACCI, AIG, the WA Liberal government—not exactly left-wing radicals. What they see is the unfolding impact of a global economic recession, and they see the need to act.

The Liberals today and in recent days have claimed they have not been consulted. I would say to the Leader of the Opposition as follows. The Leader of the Opposition less than 24 hours after the release of the government’s Nation Building and Jobs Plan, before he had seen the legislation, before the Senate committee had even begun, said on 4 February:

“The opposition will vote against this package in the House and in the Senate.”

How is it logically sustainable to argue that you should be consulted when on day one you say to the parliament and the nation that in the Senate you will vote against this plan? This is absolute disingenuousness.

Furthermore, the Liberals have fundamentally attacked the quantum of the package, against the advice that I have just referred to about the necessity of such a quantum. 

Furthermore, the Liberal Party have attacked every element of the package as well. On the question, for example, of the tax bonuses proposed: the Leader of the Opposition ruled out supporting these on day one, saying, ‘We do not support a further round of cash handouts,’ even though such measures in support of consumption have been directly supported by the IMF.

On the schools question, the Liberals have opposed the $14.7 billion school measures. The Leader of the Opposition rejected the government’s proposal on day one. He said:

“… what we’ve said—[referring to the Liberal Party]— is that the $14 billion is a very large amount of money to be focused largely on, as you know, primary school assembly halls and libraries.”

Furthermore, the Leader of the Liberal Party and the Liberal Party more broadly challenged whether schools and education were in fact a top infrastructure priority.

Let them eat their words as each of the members who have voted against this measure in the House of Representatives in the days ahead speak to each of their P&Cs, each of their P&Fs and each of their primary school principals and secondary school principals and say to them that their schools do not need this investment, that their primary schools do not need any further investment in either modern libraries or school assembly halls, that their secondary schools have no need for a modern science block or a language centre or that their P&Cs and P&Fs do not need an extra injection of funds to help with much-needed maintenance and repairs.

Then, on the question of small business, the Leader of the Opposition rejected the government’s proposal, saying it would not help small business. He said: “What he—[that is, the Prime Minister]—has proposed is a 30 per cent depreciation upfront, depreciation for purchases of new equipment by small business. Now, if you are a small business which has seen your cash flow decline, or if you don’t need any new equipment, that’s of no benefit to you at all.”

The small businesses of Australia, through their peak bodies, have welcomed this measure. Again, we find the Liberal Party out of touch with schools, out of touch with school communities and out of touch with small business.

On insulation, the Leader of the Opposition rejected the government’s proposal on day one by saying:

We would support an insulation subsidy of a lower amount, and I would suggest for the government’s consideration one that is, for example, $500 for all houses, increasing to $1,000 subject to a means test.

Again, on each of the individual measures, quite apart from the quantum, quite apart from the overall rationale for the stimulus package, the Liberal Party asks why they haven’t been consulted. They ruled out any support for this package from day one. They have undermined the need for the quantum of the stimulus from day one. And they have attacked every measure contained within it from day one. These facts speak for themselves in terms of the position that has been adopted by the Liberal Party.

Let us go, therefore, to all these Liberal claims in their aggregation. The Liberal Party say that unemployment is not a problem. We say it is. The Liberal Party say we should wait and see. We say we must act now and act decisively. The Liberal Party say the government’s plan is too big, when the IMF, the Reserve Bank, Treasury and all peak business organisations say the size is right for our current economic challenges.

The Liberal Party say that we will borrow too much. With this plan our net public debt will be about one tenth of the OECD average. They say they have been willing to negotiate, yet how can you negotiate when their leader says from day one that they will vote against the package? This, therefore, represents in aggregate the bona fides of those opposite on the question of this overall nation-building plan.

So we are left to ponder what actually is the operational strategy of the Liberal Party in this entire debate. The Liberal Party’s is not an economic strategy; it is a political strategy. It is a political strategy in three steps.

Step 1 from the Liberal Party is to do nothing or to do as little as possible.

Step 2 is to hope like hell that the global economic recession hits the Australian economy amidships, and therefore that it overwhelms the Australian economy in the course of the year ahead.

Step 3 is to turn around later next and simply say this: ‘I told you so.’ That is what this political strategy is all about. That is what the member for Wentworth, the Leader of the Opposition, knows full well. That is what those who have advised within their party room know full well. This is a strategy driven by the politics of that as well the internal politics of the Liberal Party itself. 

We know something of the debate that occurred within the Liberal Party when these matters were deliberated on. We know something of the intervention from the former Treasurer, the member for Higgins, whose passionate engagement on matters of national economic policy warrants his participation in this debate tonight—apparently not. What we have instead is not an economic strategy from those opposite but a political strategy pure and simple—a political strategy which is out of touch with the needs of the Australian economy; a political strategy which is only in touch with the political needs of the Liberal Party and its leader. That is what is at stake here.

It is for these reasons, therefore, that the government will continue to negotiate with the minor parties in relation to the government’s nation-building plan for the future. This government will get on with the business of acting in the national economic interest. This government has advanced a plan in the national economic interest. This government has advanced a nation building plan aimed at reducing the impact of a global economic recession on Australia. This government will get on with the business of acting decisively in Australia’s national interest.

APPROPRIATION (NATION BUILDING AND JOBS) BILL (No. 2) 2008-2009 [No. 2]

We are reintroducing this bill due to Senate obstruction and I refer to the Minister’s previous second reading speech on this bill.

This bill provides for the appropriation of funds to various measures announced as part of the Government’s Nation Building and Jobs Plan.

Full details of the measures in this bill are contained in the Explanatory Memorandum.

HOUSEHOLD STIMULUS PACKAGE BILL (No. 2) 2009

We are reintroducing this bill due to Senate obstruction and I refer to the Minister’s previous second reading speech on this bill.

This bill provides for amendments to various Acts to deliver the Household Stimulus Package contained in the Government’s Nation Building and Jobs Plan.

The Household Stimulus Package includes key bonuses:

• Single Income Family Bonus of $900 to eligible recipients
• Back to School Bonus of $950 to eligible recipients
• Training and Learning Bonus of $950 to eligible recipients
• Farmer’s Hardship Bonus of $950 to eligible recipients

These one-off bonuses are necessary to provide an immediate stimulus to the economy given the severity of the global downturn. It is a critical part of the Government’s National Building and Jobs Plan.

Full details of the measures in this bill are contained in the Explanatory Memorandum.

TAX BONUS FOR WORKING AUSTRALIANS BILL (No. 2) 2009

We are reintroducing this bill due to Senate obstruction and I refer to the Minister’s previous second reading speech on this bill.

This bill provides for amendments to various Acts in relation to the tax bonus payment provided for in the Tax Bonus for Working Australians Bill (No.2) 2009.

The Tax Bonus for Working Australians will be paid to resident individual taxpayers who had taxable income of up to $100,000 and who paid income tax for the 2007-08 financial year, after taking into account any tax offsets and imputation credits.

A payment of $900 will be paid to those who had a taxable income of up to and including $80,000 for the 2007-08 income year.

A payment of $600 will be paid to those who had a taxable income exceeding $80,000 to $90,000.

A payment of $250 will be paid to those who had a taxable income exceeding $90,000 up to and including $100,000.

Full details of the measures in this bill are contained in the Explanatory Memorandum.

TAX BONUS FOR WORKING AUSTRALIANS (CONSEQUENTIAL AMENDMENTS) BILL (No. 2) 2009

We are reintroducing this bill due to Senate obstruction and I refer to the Minister’s previous second reading speech on this bill.

This bill provides for consequential amendments to various Acts in relation to the tax bonus payment provided for in the Tax Bonus for Working Australians Bill (No.2) 2009.

Full details of the measures in this bill are contained in the Explanatory Memorandum.

COMMONWEALTH INSCRIBED STOCK AMENDMENT BILL 2009 [No. 2]

We are reintroducing this bill due to Senate obstruction and I refer to the Minister’s previous second reading speech on this bill.

This bill will ensure that the Government can raise the funds required to meet this temporary deficit resulting from the global recession, which has wiped out $115 billion of tax receipts across the forward estimates and moved the budget into temporary deficit.

Full details of the measures in this bill are contained in the Explanatory Memorandum.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Yesterday, we learnt that Australia’s unemployment rate had risen to 4.8 per cent. We got confirmation of just how heavily the global financial recession is bearing down on Australian jobs. We were reminded just how much Australian workers are being hurt by a crisis that is not of their making—a crisis that began far beyond Australia’s shore. Yesterday we learnt that Nylex, a household name in this country, had gone into voluntary administration. We were told that the gearbox manufacturer Drivetrain Systems International has gone the same way.

Since September 2008, when the financial crisis came to a head, overall economic activity has slowed significantly—that is globally and in Australia. This was initially manifested acutely in the financial sector with the availability of finance becoming a significant concern. Subsequently, the main impact on consumers has been a lack of confidence. This in turn has impacted on business through a lack of demand and an increase on cash flow. The Ai Group recently noted that business may be shelving planned expenditure on capital investment and training while there is a focus on contending with falling demand.

What we have seen throughout a series of economic indicators is that the Australian economy is facing a very serious crisis—a crisis which some will say is not as great here as it is internationally, but it is a crisis nonetheless. The latest lease finance data from the Australian Equipment Lessors Association, for instance, which represents more than 90 per cent of leasing activities, shows that lease and equipment finance in the motor industry fell by 14 per cent in December 2008—a 14 per cent drop in one month. In the same period, lease and equipment finance for total business—that is, the non-motor sectors of the economy—fell by 24 per cent. New business in December was 20 per cent lower than it was a year before, or around 2005 levels.

We are facing an acute challenge in this country. Yesterday we were greeted by a National Australia Bank Quarterly Business Survey showing that business conditions continue to deteriorate and that business confidence is at its lowest levels since the early 1990s. And on this day of all days the opposition chose to block the government’s Nation Building and Jobs Plan. They refused to reach out their hands to workers and businesses at risk. They said: ‘Let the market sort it out. Whatever the market decides is fine by us. If market forces try to destroy your job, you must deserve it.’ That was the logic of the position that has been put here: if market forces take away your home, it must be for the best; if market forces undermine your business, you have only yourself to blame. This is essentially the philosophy that has been put to this chamber.

It is a matter of deep concern to me that the opposition do not seem to notice that the market has failed many Australians. They do not seem to appreciate, they do not seem to notice, that their callous neoliberal doctrine has been totally and completely discredited. It is a doctrine that has tripped the global economy into free fall, and Australian workers are now paying the price. The American financial crisis erupted with the global economic crisis when Lehman Brothers collapsed last September. Since that time, 47,000 Australians have lost their jobs. The government has been completely upfront about what impact the meltdown would have on Australian employment. This is a reality this parliament has to face. It just does not follow for us to simply sit back and take whatever the world throws at us. Governments do have the power to intervene in the economy to safeguard their citizens, and the worst failings of the market—and it is a point that seems to be lost on so many senators in this chamber—

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

On the other side.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Clearly on the other side, because this government is of the view that we should be using every weapon at our disposal to fight for jobs and prosperity in this country.

We go into that fight with important advantages. Australia is in much better shape than just about any other developed country to ride out the storm that has now engulfed the world. Our economic fundamentals are sound and our financial system is strong. Our unemployment remains well below that of other countries. Unemployment is 6.3 per cent in the United Kingdom, 7.2 per cent in Canada, 7.6 per cent in the United States, eight per cent in the euro area and 14.4 per cent in Spain. But is the response to that situation to do nothing? Do we consign the Australian economy to this accompanied by inaction, which seems to be the proposition that is being put to this chamber by the opposition?

The government has made its position very, very clear. We have to act swiftly and decisively to keep Australians in work. It is impossible to overstate the urgency of the task. There is absolutely no time to waste. It is completely idle to suggest—as the Leader of the Opposition has done—that we should think about stimulating the economy at some undefined time in the future. We need that stimulus now. That is the view of the International Monetary Fund. It is the view of the Australian Treasury and the Reserve Bank. It is the view of the Business Council of Australia and the Australian Industry Group. It is the view of the Australian Chamber of Commerce and Industry. In fact, the chamber has called the opposition’s decision to sabotage the government’s plan ‘a blow to business confidence and investment certainty’. All of these authorities are convinced we need immediate action. I can assure the chamber that it is also the view of the Australian government.

That is why in four short months we have introduced deposit and wholesale funding guarantees; we have invested $4 billion in the residential mortgage market; we have implemented a $10.4 billion Economic Security Strategy to fuel activity and to assist the vulnerable; we have announced a long-term $6.2 billion plan to support the automotive industry; we have invested $300 million in regional and local government infrastructure; we have negotiated a $15.1 billion investment in education, health and housing reform through the Council of Australian Governments; we have provided guarantees for a $2 billion special-purpose vehicle to give car dealerships critical liquidity support; we have brought forward a $4.7 billion nation building package of infrastructure investment and to support capital investment by Australian businesses; and we have established a $4 billion Australian business investment partnership to protect jobs in the commercial property sector. At the same time, the Reserve Bank has cut interest rates from 7.25 per cent to 3.25 per cent. I note that the four big banks have only passed on about half of that for business lenders. We said we would move heaven and earth to keep the Australian economy growing, and we meant it.

All of these actions are designed to address today’s challenges and to make us stronger for the future—and so is the Nation Building and Jobs Plan. This is a plan to boost GDP by half a per cent this financial year and by one per cent in the period 2009-10. It is a plan to support 90,000 jobs over the next two years. It includes the largest single school modernisation program in Australian history; our largest single investment in housing; a massive investment in ceiling insulation to cut energy bills and to reduce carbon emissions; support for individuals and families bearing the brunt of the crisis, in the form of one-off cash payments; and 30 per cent tax breaks for businesses large and small in terms of their investment decisions. It is about an immediate injection of support to lift aggregate demand. It is about ensuring that this country moves through this storm as quickly as possible.

Each of these measures is designed to do two things. One is to deliver enduring social, environmental and economic benefits for Australia. The other, as I say, is to give an immediate boost to jobs and to growth—and we should be very clear about this: unemployment will be higher without this plan. Blocking this plan will put Australians out of work. Delaying this plan will put Australians out of work. Compromising this plan will put Australians out of work. How many jobs will be lost before the Liberals and the Nationals wake up to themselves? How much more hardship do people have to face before those on the other side of the chamber see that their free-market fundamentalism is an ideological dead end? How much danger does Australia have to be in before the Leader of the Opposition stops worrying about the member for Higgins and starts worrying about the national interest?

There is no rational basis for their opposition to this plan. It is not about debt and it is not about deficits. Mr Turnbull is talking about spending $20 billion now—he has discovered the need to spend some money—and saving the second shot, as he puts it, presumably another $20 billion, for later on. The only thing that they really will to change here is that the fiscal position will be much, much worse. Delay will cause a further deterioration in business confidence, will undermine further the levels of investment, will undermine consumer confidence and will cause higher levels of unemployment. All the economists around the world acknowledge this simple proposition.

The IMF has stressed that repeatedly. The need for action is immediate. In a recent paper on fiscal policy for the crisis, the fund described the essential ingredients of any successful stimulus package. The first, they said, is that it has to be timely. It is a pity this chamber does not appreciate the meaning of that word—timely. Second, it has to be large. It must be timely and large—not half-hearted, not half-baked. It has to be timely and it has to be large. The evidence is already coming in that last October’s economic security package actually helped support jobs and economic activity over the last couple of months.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Abetz interjecting—

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Senator Abetz, you should appreciate this. Governments can make a difference, if they are prepared to act quickly and act boldly. But the opposition is offering us the alternative: delay and timidity. The alternative to this government’s plan will only guarantee that Australian workers and businesses feel the full devastating impact of the global recession. It is a recipe for accelerating the decline in government revenues. It is a recipe for escalating the cost of relieving hardship. It is a sure-fire recipe for weakening the national balance sheet.

Of course, their position is not about economic responsibility. I find it incredible that the opposition can turn their backs on what they said was the great Menzies tradition—the tradition of economic responsibility. They have turned their backs on it. That is why we have seen a 20 per cent drop in their ratings in terms of who can manage the economy. That is because the public is beginning to understand that the opposition is economically irresponsible. They are about dogma. They are about petty politics. They are about killing hope for a headline. They are about burning down the house so that they can feel an inner glow.

The government cannot and will not stand back and let this happen. It will fight. It will fight every step of the way to get this plan through. We owe that to Australian workers, we owe it to their families, we owe it to Australian businesses and we owe it to the Australian people. It is their interests that should be paramount at this time. That is why we accepted constructive amendments proposed by the Greens, that is why we are prepared to accept modifications to ensure this package is passed through this chamber and that is why we have created so many measures since October. It is very much along that line of thinking. We have created 10,000 structural adjustment places under the Productivity Places Program to retrain workers displaced as a result of the global meltdown. Labor always stands ready to support the unemployed. But our first priority is to reduce the risk of people losing their jobs in the first place, and that is what this plan is all about. The plan is about maintaining the levels of economic activity to minimise the risks of job losses.

According to the economic orthodoxy that has prevailed for so long in this country, we should not be doing any of this. According to the neoliberal theorists—the views that dominate the position of the Liberal Party—we should entrust our fate to some invisible hand, no matter how long the jobless queues grow, no matter how many businesses go bust, no matter how much wealth is destroyed. The government reject this view, as do economists around the world. They understand the need for timely action.

We do call upon all senators in this chamber to acknowledge that simple fact: we need timely action, urgent action. We believe that there is a central role for government in regulating markets and providing public goods. We believe that we have a moral responsibility to ensure the prosperity of our people. We believe that we have an obligation to pursue this course of action to minimise the level of social hardship, to minimise the job losses, to minimise the levels of economic distress. Governments cannot abdicate their responsibility for maintaining economic stability. It is precisely the failures of governments to discharge this responsibility that has led to this crisis. The first duty of any government is to protect its people and that includes protecting them from the worst excesses of extreme capitalism.

That is what the government are doing. We are about ensuring that this country moves through this storm as quickly as possible. We call upon all senators to acknowledge their responsibility to the Australian people to ensure that we are able to see the timely and urgent action that is required to prevent further economic distress and further harm to this country.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Having listened to that contribution, I am sure that those listening in will be assured that not all dinosaurs are extinct. Indeed, we had a good old socialist style rant from Senator Carr in relation to this matter.

Let us get back to the very beginning in relation to what happened in about October 2007. We as a coalition said to the Australian people that an economic tsunami was coming our way. We predicted what would happen.

What did Labor do? They scoffed. They laughed. They said, ‘These nasty neoliberals are trying to scare you into voting Liberal. There are nothing but blue skies ahead and Kevin Rudd will make it even better.’ That is what they said and we were pilloried. Interestingly, Senator Carr says that the government’s policy is now to go for growth. Guess whose slogan that was at the last election? It was John Howard’s, which was condemned by Labor and Mr Rudd on the basis—and I remember Kevin Rudd thundering during his campaign speech—that ‘this reckless spending must stop’! All we were doing was spending a bit of the surplus, but that was ‘reckless spending’. Here are Labor now, 13 or 15 months later, not only wiping out the totality of the surplus but putting Australia $200 billion into hock.

Kerry O'Brien (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

There is a global financial crisis.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator O’Brien interjects and says it is all the financial crisis. But, you see, Australia would have been so much better placed if the silly nonsense, the divisive and unsustainable nonsense, of Mr Rudd had not been allowed to impact the Australian economy and the budget. Remember, in January last year the economy was overheating: those nasty Liberals had made the economy grow too big! It was growing too fast and it had to be slowed down. What did Kevin Rudd do in the May budget? Through taxation measures he hoovered out of the economy $20 billion of extra taxes—keep that figure in mind, an extra $20 billion of taxes hoovered out of the economy—designed to slow the economy down because it was overheating.

They were still going on with that mantra in the face of all the evidence that we had predicted to them would overtake the Australian economy. So the situation today is that Australia is in a worse position to face this crisis because of the mismanagement of the economy by Labor. If they had allowed growth to continue, if they had not hoovered out that $20 billion by way of extra taxation, the economy would not have fallen into as big a hole as it is in today. Sure, it still would be in a hole because of the economic crisis, but I am saying—and I think most economic commentators now accept—that the Liberal-National plan for the economy, if it had been adopted, would have had Australia in a much stronger position.

I remind those opposite that when we left office unemployment was 3.9 per cent. After 12 months Labor, in their usual style, have already got it up to 4.8 per cent and it is heading north very quickly. What is their remedy for this? ‘Let’s borrow $200 billion.’ All they talk about is protecting this, doing this somehow—it is all good, sweet and light. And of course it is if you go on a spending spree and you pull out the bank card. It is great going round all the shops being able to buy up everything. But one day you have got to pay it all back. It is a bit like a big lolly. In fact it is not a lolly; it is more like a pill with a very thin veneer of sugar coating over it. You offer it to people and say: ‘Look, taste this—how sweet is this! We can deliver $950—sorry, we have amended it now—$900 to you, $600 to you, $300 to you. We will give you a new school. We will even give you pink batts and a boom gate—you name it, we will deliver it, all at no cost.’ But the reality is that—and I think that the Australian people are waking up—all this sweetener on the outside of this very large pill hides a very big, bitter centre that will leave a very bad economic aftertaste in the mouths of Australians.

What we on this side are concerned about is that, in 10 or 15 years time, when the next generation of leaders are in this place and they have demands from their community asking, ‘Where is some money for a hospital or a road or a school?’ they will be told by the Treasurer of the day, ‘Sorry, the money ain’t there.’ The community will ask why, and the answer will be, ‘Because we have a recurring interest bill of $7 billion to $10 billion per annum,’ and they will rightly ask, ‘Who incurred that bill? Who incurred that bill and mortgaged our future?’ The answer will be: Mr Rudd and the Labor Party, aided and abetted by the Australian Greens—and can I say economic management has never been the strong suit of either the Australian Greens or the Australian Labor Party.

But I say to Senator Fielding from Family First: put not only families first but every individual family member first—because if Senator Fielding does vote for this package he will incur a debt of $9,500 for every man, woman and child in this country. And that is just the debt. There is then the interest to be paid year after year after year. Mr Rudd tells us it is only going to be short term. That is all very well until you ask how long short term is: ‘Sorry, we can’t tell you. We can’t tell you what “short term” means.’ And that is where the political spin comes in. Mr Rudd is not about economic management; he is about political management. If he cannot tell us how long this debt will last, he should have the decency and honesty to tell the Australian people that, rather than try to con them by saying, ‘This will only be short term.’

Let us keep in mind, my friends, that it took 10 long years to pay off the $96 billion worth of debt that the Hawke-Keating era racked up over 13 years in government: 13 years in government, $96 billion of debt. Mr Rudd weaves his economic wizardry and in the first 13 months of his leadership of this country he has budgeted not for $96 billion but for $200 billion worth of debt. That will be like lead in the saddlebags of the Australian economy. It will stall economic growth in the future. When the economy turns, it will recover a lot more slowly. As a result, people will be unemployed for a lot longer. There are economic consequences—negative economic consequences—of borrowing. That is why we as an opposition are so very strong in seeking to ensure that there is intergenerational social justice here. Let us make no mistake: intergenerational social justice—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You would not know what you are talking about. You are illiterate.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

and economic justice demands that we do not mortgage—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You are illiterate.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

the future of our children and our grandchildren.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You are seriously illiterate.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Labor Party do not want to hear about the mortgage. They do not want to hear about the debt. All they want to hear about is the spend, spend, because that has been the history in this country. You had Prime Minister Whitlam, and then Fraser had to fix it up. You had Hawke and Keating messing up the economy, and then Howard had to fix it up. Of course, what will happen here very, very soon is that Mr Rudd will have mucked up the economy, and Mr Turnbull and the Liberal-National parties will have to clean up the mess. Let us not forget that 21 April 2006 was ‘debt-free day’ for Australia. That is how long it took us to pay off the debt—21 April 2006; that was ‘debt-free day’. It has only taken a very short period of time for the Rudd government to want to legislate for $200 billion worth of debt.

So I say to Senator Fielding, I say to Senator Xenophon and I say to the Australian Greens: you might get some support in the polls today, tomorrow—and the Labor Party—and we accept—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You’re not.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Conroy in his arrogant way interjects and says, ‘You’re not.’ We have accepted that we may well take a hit in the opinion polls, but, as the Leader of the Government in the Senate this morning in the procedural matters so foolishly told the Australian people and the Senate, the problem with the Liberal-National parties is they are looking to the long term. We plead guilty! We plead guilty because in parliament you have to look to the long term if you want to be a true national leader. It is so easy to play the short term. Senator Evans has clearly shown the Labor Party is all about playing to the short term. But I, for one, and my coalition colleagues cannot look our children and grandchildren in the eye, put our hands on our hearts and say, ‘Guess what? To make our lifestyle more comfortable today, we are going to mortgage your future by $200 billion.’ It is amazing, isn’t it?

Do you know what Mr Rudd said? ‘The economic crisis has been caused by greed and a squeeze on credit. There is too much demand on credit and as a result we have got problems.’ So how do you ease the demand on credit? By going into the marketplace and demanding an extra $200 billion! That sure is going to fix the credit squeeze! Then there is the issue of greed. If this generation has been too greedy—as it has according to Mr Rudd—tell me: how does mortgaging our children’s future indicate that we have learnt that lesson of greed? What Mr Rudd is saying is: ‘Well, sure, we’ve been greedy. What’s more, we’re going to take even more, and some poor, hapless generation down the track, when I’m no longer Prime Minister, can pay it off.’ Now, there is a definition of greed if ever there was one.

We have indicated that sensible, responsible packages are important. In the United States President Obama, with a huge election victory under his belt, had the decency to approach the Republicans, the opposition, and say, ‘Can we work together to work out a deal?’ Guess what? They did. What great leadership, what great statesmanship. That was unlike our Prime Minister’s approach. Our Prime Minister dropped something on the table and said, ‘Within 48 hours this has to be passed or else.’ We were basically misled—I am not allowed to say someone lied, because that is unparliamentary, so I will not. But the leader of the government in this place said that this had to be passed by last Friday otherwise the payments could not be made by 11 March this year.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Senator Williams interjecting—

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

And as Senator Williams interjects quite rightly, that was rubbish. The Senate committee investigating this was told that that was wrong. Time and time again I have invited the Leader of the Government in the Senate to explain to the Senate and the Australian people why he misled them and on whose advice he said it. Given that we have not had an answer now for over a week, we can only come to the conclusion that it was cheap, short-term politics to hector and force senators to vote for this package.

This package was so sacrosanct that it could not be amended or changed. In a dastardly deal with the Greens, they have now amended $500 million worth. So, instead of only having boom gates and pink batts, we are going to have a few other things as well. But at the end of the day there are no savings; it is still the same debt. What concerns me and many other Australians is: what other side deals done with the Greens did not find their way into the letter signed by the Treasurer? A lot of people fear especially for the timber industry in that regard.

I want to finish on this. The Australian Labor Party have said that this is urgent. They recalled the parliament for nine o’clock this morning. Our view is that, if Labor can strike a deal with Senator Xenophon and others—and we accept whatever the numbers might be; that will be the way the numbers fall—so be it. Good luck to them. But what we are going to go through here this morning is high farce and an indication of the shambolic management of this Senate by the Australian Labor Party, because from now on we will hear Labor speaker after Labor speaker after Labor speaker filibustering whilst Wayne Swan and Senator Xenophon are trying to cobble together a deal.

Helen Coonan (NSW, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

It’s a disgrace.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You are right, Senator Coonan; it is a disgrace. They should have said: ‘We will sit down in a calm, timely manner and discuss the issues. When we have a deal, we will recall the parliament and deal with it.’ But today the Senate is sitting—and it costs about $10,000 an hour to run this show—and we will be hearing speech after speech after speech from Labor senators. I am sure Senator Jacinta Collins will be next. This is only to buy time for Mr Swan and Senator Xenophon to cobble together a deal. Why wasn’t the Senate adjourned until such time as a deal had been reached? They should act in a statesmanlike way; they should not use bullyboy tactics to try to force people into a position.

The Senate voted on these measures 15 or 16 hours ago. What has changed, other than this package that could never be amended all of a sudden now being capable of being amended? From day one we said that we oppose the package, but we also said that we were willing to negotiate around the package. Did Labor approach us? Never. All Mr Rudd was able to say was, ‘Get out of our way.’ He refused to get off his bulldozer. Well, the Senate has voted and as a result Mr Rudd’s bulldozer has stalled. He has been humiliated into backing down, he has been humiliated by the Greens and I assume he will be humiliated by Senator Xenophon. Quite frankly, I do not know what Senator Fielding will get out of this, other than a legacy that Family First in this parliament voted for $9,500 of debt for every man, woman and child. That is not a great legacy. Senator Fielding, it is not too late to change your mind. There is an alternative approach, and that is the alternative approach put by Mr Turnbull, which does include tax cuts. Like every other package in the world—

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Oh, come on. You’re misrepresenting the evidence.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Like every other package in the world, Senator Collins—

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Stop misleading the Senate.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You can interject as much as you like.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I’ll bring in the Hansard for you.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You can deny as much as you like, but the truth remains the truth, despite Senator Collins’s interjections. We have a different approach. We actually support jobs without Australians bearing this unbearable debt. I simply say that we as an opposition oppose the severity of this package, the huge debt that will be foisted on future generations. Those senators who vote for it will be responsible to those future generations.

Labor senator after Labor senator will filibuster, but we will not be party to the filibuster. I have set down the opposition’s position in relation to this.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

What? You have been speaking for 20 minutes.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Yes, I have, and we continue to oppose— (Time expired)

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Sometimes I wonder whether Senator Abetz and I are actually in the same room. His comprehension and reporting of various incidents, particularly through that diatribe just now, is outstanding. I am going to be sidetracked from a speech I have now sought to deliver I think at least two times. Hopefully, I will get back to some of the issues that Senator Carr raised earlier, but I will be sidetracked to address some of the blatantly false points that were raised by a number of opposition senators in the earlier procedural discussion and are being raised now in relation to this package of bills. They raised blatantly false matters before the Senate again today in relation to the urgency of this matter and how it is progressing.

Firstly, let us deal with Senator Minchin’s and Senator Joyce’s concerns about filibustering. As I said, as one of the senators who participated throughout the committee inquiry, this is the second time I have wanted to deal with this package of bills and have been encouraged, as a government senator, not to occupy the Senate’s time so that opposition, Green, Independent and Family First senators would have all the time they need within the Senate. Finally, we got to the committee stage debate. We were then encouraged to take some small amount of time whilst we allowed for the opposition, the Greens, Senator Xenophon and Senator Fielding to review their positions and come forward with amendments. There are no opposition amendments and that is probably the best example of the lack of bona fides from the opposition on this matter. They could not even evidence any sign of an alternative plan in this debate. They could not prepare amendments to demonstrate their bona fides. As an opposition they have been incapable of coming forward with a plan.

Then there are also the falsehoods. It is not only the incompetence that is being demonstrated from this opposition but the falsehoods that are particularly worrying here. They claim they have not been consulted. That is simply untrue. I do not know who Senator Abetz talks to, and obviously there are some issues within the opposition. The Leader of the Opposition has made this claim as well. Let us look at what consultation has occurred. There was consultation less than 24 hours after this package was released, then again before they had seen the legislation and again before the Senate committee had even begun. The real issue here, though, is that on 4 February the Leader of the Opposition said:

The opposition will vote against this package in the House and in the Senate.

As Senator Evans has pointed out, they dealt themselves out of this situation. They said to the Australian public, ‘We will oppose this regardless.’ Then we sat in the second reading debate and listened to speech after speech after speech, which in one sense ultimately provoked me to come forward, about very misleading situations in relation to debt—which we have had from Senator Abetz again today. The only way I could characterise the position that I heard from senator after senator after senator was that of global financial crisis scepticism; they are sceptics. We already know they are climate change sceptics on the whole, but in relation to the global financial crisis? For goodness sakes!

We are confronting a crisis and Senator Abetz again tries to sheet that home to the current Labor government. He tries to claim that it has been our economic management that has put us in the situation we are in now. If you listened to the way Senator Abetz reported the situation you would probably say that it was the vote at the last election and that the Australian public put themselves in this mess. ‘The Australian public should have listened to John Howard. He had the right plan and if we had followed his plan we would be much better off now.’ That is essentially Senator Abetz’s revision of history.

Senator Abetz’s only problem is that he stands here this morning and claims that economists support him in this perspective. I asked him in the chamber when he made that claim, ‘Find one. Name me one economist who thinks we would be better placed now if the Australian public had listened to the Howard government at the last election and had voted them in to manage the economy.’ That is not what this week’s polls say. This week’s polls say the Australian public, in an unprecedented fashion, are downgrading this opposition’s economic management credentials. It is not just Labor, it is not the Greens, it is not Senator Xenophon and it is not Senator Fielding, all of whom acknowledge the crisis that we are in and the need for urgent action, and it is not any economist that I have come across. But Senator Abetz stands there and says: ‘Even the economists agree with my revision of history. And if we had had John Howard we would be much better placed.’ Unfortunately for the opposition, if we look at the critical issue that we are trying to address now, which is to stimulate the economy and jobs, the Australian public know the Howard government credentials on jobs. Senator Abetz might be happy to believe that what they confronted on Work Choices overpowered the Australian public’s good sense on economic management. I do not think so.

Any member of the Australian public who listened to the second reading debate that came from the opposition the first time we addressed these bills would shake their heads in frustration. The economic credential coming from the coverage of those on the other side was illiteracy, economic illiteracy, which is also what we saw principally during the Senate committee discussion in a range of areas. But the really worrying thing is when the economic commentary goes to even the opposition leader’s position in this area. Earlier this week I put aside a quote from Ross Gittins of the Sydney Morning Herald. I think it encapsulates extremely well the general economic illiteracy that has been occurring in this debate. He said:

Malcolm Turnbull’s opposition to the $42 billion package is humbug.

I almost commenced my contribution with ‘humbug’, Senator Abetz. It goes on:

It seems almost completely politically motivated. He accepts that there’s nothing sensible the Government can do to stop the downturn pushing the budget into deficit—

he accepts this—

and he accepts the need for stimulus, which will add to the deficit. He claims the Government intends to borrow $200 billion (which is wilfully misleading)—

these are Mr Gittins’s comments, not mine—

and then admits he would borrow only $22 to $27 billion less than Rudd plans to.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Right now.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Yes, right now. I could go on and quote economic commentator after economic commentator, both Australian and international, the IMF and the OECD.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I’m going to.

Jacinta Collins (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Conroy tells me he is going to, so maybe I will move to some other areas of my contribution to save the Senate time. Seriously, Senator Abetz, if your earlier contribution reflects the opposition’s case for the extraordinarily high-risk position you have taken here, then I suspect you face opposition for a very long time. Economic illiteracy is about the best description, as one of my colleagues put it to me.

Let us go back to the opposition position on the package, just to deal with some more facts rather than myth. The Liberal Party reject every element of this package. It is not just that Mr Turnbull said, ‘We’re going to vote against it in the House and in the Senate.’ They reject every element of this package. They reject the size. The Liberals’ view is that the package is too large. They were unwilling to listen to the advice from Treasury. They want a package half the size, unless you accept their earlier rhetoric of ‘letting the market rip’ or, indeed, Julie Bishop’s view, which was, ‘Let’s wait and see.’ Even if we present the best-case scenario, they want a package half the size. Let me quote Mr Turnbull from 4 February:

Our judgement is that a more appropriate level of stimulus is in the order of 1½ to two per cent of GDP, or between $15 billion and $20 billion.

That is their view, even though the Treasury advice was that a smaller package would not do the job. Let us look at Dr Henry’s comments. He said that with a smaller package:

… there would be some point at which GDP growth in 2009-10 in particular might well have been negative.

I could go on about the other elements of the package, the opposition’s objection to tax bonuses, their misrepresentation of international evidence, their misrepresentation of the situation in relation to schools, their lack of comprehension about the small business element of the package and their misunderstanding of what the insulation proposals will achieve, but I am conscious of allowing the Senate to consider these issues in the light of other contributions. I despair at the misrepresentation of the situation by the opposition. I encourage Senator Xenophon to pick up that bucket. Yes, the ship will sink unless we do something. This is your description of the situation we confront. Do not just believe we are going to sink anyway. Pick up that bucket and start bailing.

Question agreed to.

Bills read a second time.